3 Things You Might Not Know About DBS Group

DBS Group Holdings Ltd (SGX: D05) has been racking up awards over the past few years.

On 6 September 2020, DBS was bestowed the title of “Best Bank in the World” by New York-based financial publication Global Finance for the third consecutive year.

Today, we will look into what sets this bank apart from the rest of its cohort.

A leader in digitalisation

DBS began its digital transformation journey in 2014, ahead of its peers Oversea-Chinese Banking Corporation Ltd (OCBC) (SGX: O39) and United Overseas Bank Ltd (SGX: U11), or UOB.

The award-winning bank introduced the “Making Banking Joyful” initiative in a bid to reduce customer banking time through digital means.

The company underwent structural changes to fully embrace its digital transformation.

Under the guidance of CEO Piyush Gupta, DBS adopted an agile start-up culture with a keen focus on its customers.

By 2018, the company had spent S$4.3b on technology, offering five different mobile banking applications in the app store.

In contrast, UOB spent S$1.2b on technology in the same period with one mobile banking application, while OCBC had two mobile banking applications.

DBS is not taking its digital lead for granted.

In the last two months, the bank has introduced three digital partnerships – two for system improvements and one for employee skills upgrading.

The company is working with fintech Doxa to introduce Singapore’s first automated supplier procure-to-pay solution for the construction sector.

Additionally, DBS is also working with the Government Technology Agency of Singapore (GovTech) to trial face verification technology for SingPass, the online account management system for Government e-services.

Lastly, the company has engaged Amazon Web Services (AWS) to upskill 3,000 of its employees in artificial intelligence and machine learning through gamified online learning tutorials.

The past digitalisation efforts of DBS have yielded many benefits for the company, especially during the current COVID-19 environment.

Through its sustained developments in digitalisation, DBS is poised to maintain its position as the leader of digital banking in Singapore.

One of the lowest CDP account brokerage fees

For investors looking to have their stocks stored in their CDP account, DBS currently offers one of the most competitive rates.

Unlike the other brokerages offering CDP services, DBS has a discounted fee for their buy trades when using cash upfront funding.

This attractive rate could go some way in convincing investors to use DBS Vickers as their trading platform.

In the first half of 2020, DBS recorded a 25% year on year increase in brokerage fee income.

On the other hand, UOB announced a 4% year on year decrease in trade-related fee income, while OCBC reported a 70% year on year increase in brokerage fee income.

Inclusivity at its core

Increasingly, the world is looking for corporations to uphold environmental and social responsibilities.

Through research papers and cost studies, governments are better able to compute the true cost of intangibles such as employee happiness and environmental damage.

Therefore, companies should expect harsher regulations and rules to govern their social responsibilities.

A company like DBS has less to worry about when it comes to corporate social responsibility (CSR).

In the past decade, the bank has been at the forefront of this movement.

In 2012, DBS joined the International Integrated Reporting Council’s (IIRC) pilot programme for sustainability efforts.

It was the first Southeast Asian company to participate in the programme. Since 2015, they have published integrated sustainability reports annually to review the respective year’s CSR initiatives and future plans.

In 2019, the bank was in line with six of the United Nation’s (UN) 17 sustainable development goals (SDGs).

Apart from the usual environmental efforts, DBS has also set its sights on alleviating a unique yet burgeoning social issue: gender inequality.

Since 2018, DBS has been part of Bloomberg’s Gender-Equality Index (GEI).

Membership to the GEI requires high levels of transparency and performance across five criteria.

The requirements are: female leadership and talent pipeline, equal pay and gender pay parity, inclusive culture, sexual harassment policies and a pro-women brand.

UOB has been featured in the GEI since 2019, while OCBC is not part of the GEI.

On top of an inclusive internal culture, DBS is also involved in external endeavours to aid female entrepreneurs across Asia-Pacific.

A 2017 UN report identified limited access to finance as a major factor for business discontinuance among women.

Just last year, the company invested US$12 million into the Women’s Livelihood Bond 2 (WLB2), which serves to empower underserved female entrepreneurs throughout Asia.

As much as it is a social responsibility, the bank’s support for gender equality may turn out to be a smart financial decision.

According to Boston Consulting Group’s (BCG) study of 350 companies, start-ups with female founders performed better than their male counterparts.

Over a five-year period, the female-led start-ups generated around 10% more revenue.

By cultivating an early relationship with budding female entrepreneurs across Asia, DBS is poised to forge strong partnerships with companies of the future.

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Disclaimer: Zachary Lim does not own shares in any of the companies mentioned.

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